Title
Discuss and consider action to authorize the City Manager to amend the IESI solid waste contract to allow a price adjustment increase as allowed in the current contract which became effective on February 1, 2010.
Summary
The contract between IESI and the City of Pflugerville was approved on November 16, 2009 and became effective on February 1, 2010. A copy of the contract is attached to this agenda item. The term of the contract is for three years, concluding on January 31, 2013. Section 10A of the contract, titled Operating Cost Adjustment states that beginning on February 1, 2012 and anytime thereafter during the term of the contract, IESI may petition the City of Pflugerville for rate and price adjustments on the basis of material or unusual changes in its cost of operations. IESI shall provide documents and records in reasonable form and sufficient detail to reasonably establish the necessity of any requested rate adjustment. The letter from IESI requesting the operating cost adjustment and supporting documentation is attached. Finance staff has reviewed the documents and calculations presented by IESI and researched other sources of price indices. Staff concurs that the CPI numbers shown by IESI reflect both the national and regional increases within the twelve months ending November 1, 2011.
Since 1991, a portion of the solid waste bill has been allocated to the General Fund in the form of a franchise fee. Originally, this fee was calculated at $2.00 per month per account, to be applied to the cost of maintaining and billing the accounts. As you can see on Attachment A to this agenda item, the franchise fee since 1991 has fluctuated with changes in billing amounts. Since 2006, the franchise fee has been $.94 per account per month. Staff is recommending absorbing this increase to the cost of the solid waste and recycling service which will result in a franchise fee of $.44 per account per month. The alternative to the City absorbing th...
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